Memorandum to Hon’ble Prime Minister

NATIONAL CO-ORDINATION COMMITTEE OF PENSIONERS ASSOCIATIONS.
13-C Feroze Shah Road,
New Delhi.110 001
Website: http://www.nccpahq.blogspot.com
Email. nccpahq@gmail.com

President: Shiv Gopal Misra: Ph: 9717647594
Secretary General: K.K.N. Kutty Ph: 9811048303

Dated: 27th November, 2018.
To
The Honourable Prime Minister,
Government of India,
South Block,
New Delhi. 110 001.

Dear Sir,

We submit herewith a memorandum containing the demands, issues and grievances of the Central Government Pensioners. We request your goodself to kindly cause consideration thereof with a view to provide relief to them.

Thanking you,
Yours faithfully,

Sd/-
K.K.N. Kutty
Secretary General.

Memorandum

On behalf of the community of pensioners who retired from various Central Government establishments after putting in more than three decades of active service, we submit the following for your kind consideration and necessary direction to the concerned to evolve solutions to the issues raised therein. Before we dwell upon the issues in detail, permit us to mention sir, that NCCPA is the apex organisations of the Central Government Pensioners Associations in the country. Our affiliates also include associations of Pensioners of the Central Autonomous bodies. The grievances of the Pensioners mainly arise from the non-settlement of the following issues.

1. Implement option No.1 as per the pension fitment formula as recommended by the 7th CPC and grant MACP benefit with effect from 1.1.2006 .

The 7th CPC in appreciation of the demand placed by the Central Pensioners organisations jointly had recommended two distinct methodology of Pension revision leaving it to the beneficiaries to choose whichever is beneficial to them. The entire pension community was highly appreciative of the said recommendation and pleaded for the acceptance thereof to the Government. Unfortunately the Pension Department advised the Government not to accept Option No.1 on the ground that it was not feasible to be acted upon. The Government heeding to the said advice, accepted the recommendation and issued notification in which it was specified that the acceptance of the Government of the 7th CPC suggestion is subject to its feasibility of implementation. The subjective clause in the Notification was without precedence and appeared to be strange. In order to meet out the objections from large number of Pensioners, a Committee under the chairmanship of the Secretary of the same Pension Department was set up. The Committee made the same recommendation to the effect that the suggestion of the 7th CPC contained in Option Nol1 was not feasible. They however suggested to the Government an alternative formulation to replace the recommendation of the 7th CPC. This was primarily to benefit the officials in organised Group A service, where career progression was time bound. In a written submission made to the Committee, the Staff Side of the National Council JCM pleaded for offering all the three alternatives so that the pensioner would be able to choose whichever was beneficial to them. The Committee’s conclusion that option No. 1 was not feasible was flawed in as much as the document, which the official side affirmed as the bare necessity to implement Option No. 1 was available in the case of 86% of the pensioners, even according to the Committee’s own finding. The Committee’s report was heavily one sided and was conceived to favour a section of the pensioners, especially those who retired from the higher echelons of the bureaucracy. If the third alternative , which was accepted and implemented had benefited pensioners who had retired from the lower rungs of the hierarchy, it was incidental. Our submission before your goodself is that the Government, having accepted the recommendation of the 7th CPC must implement the same. The feasibility or otherwise of the recommendation must be subjected to critical scrutiny. The Committee’s finding that the Pay Commission’s recommendation was not feasible had been made to enable them to put before the Government the third alternative. There is no difficulty in disproving the Committee’s findings on the question of “feasibility”. A large number of pensioners would have been benefited and the question of parity between the past and present pensioners would have been properly addressed.

Another related issue is the date of effect of the MACP Scheme. The recommendations of the 6th CPC was implemented with effect from 1.1. 2006. However, while issuing the orders the MACP was introduced from a different date i.e. with effect from. 1.09.2008. The matter went first to the Armed Forces Tribunal, where the Govt. lost in as much as the Tribunal made it clear that the Government’s decision to implement MACP from 1.09. 2008 was wrong. The Government took up the matter before the High Court, where again they lost. The matter went upto the Supreme Court,who also confirmed the position taken by the Tribunal. Having reached a finality, the Government issued orders making the scheme effective from 1.1.2006 but only in the case of armed forces personnel, leaving out the Civilian employees and Pensioners from the ambit of their latest order. This is despite many decision of the Honourable Supreme Court that similarly placed personnel should not be dragged to the court for redressal. The Staff Side of the National Council, JCM had taken up this issue with the Government twice but are disappointed as those communications have not been responded with till date. We request that the Department of Expediture, Ministry of Finance and the Department of Personnel may be directed to issue orders extending the MACP Scheme effective from 1.1.2006 in the case of all civilian pensioners.

2. Revise the Pension of BSNL absorbed retirees with 15% fitment recommended by the 3rd PRC and approved by the Government from 1.1.2017 delinking the wage revision in BSNL.

When BSNL was formed in 2000, the entire employees working in the Department of Telecommunications were absorbed in BSNL with assurance of better prospects and pension from consolidated fund of the government of India. Rule 37A was incorporated with the CCS (Pension) Rules , 1972 to ensure them government pension and also their pay was upgraded to IDA scales. The pension revision was given to them with 30% fitment , recommended by the 2nd PRC for the PSU employees from 01-01-2007. Later, they were also granted pension revision based on the 78.2% IDA fitment at par with the working employees of BSNL. But both these revisions were much delayed due to a condition of 60:40 stipulated by the government for payment of pensionary benefits. However with much effors and struggles, this condition was annulled by the Cabinet and the order issued vide No.40-13/2013-Pen (T) dated 20-07-2016. It is stated in the order, Para 2 (b) that “The liability towards pensionary benefits including family pension to the BSNL employees (excepting those recruited after 01-10-2000), as per sub rule, 22 of Rule 37-a of CCS (Pension) Rules, 1972, lies with the government.”

The 3rd PRC has recommended 15% fitment for the pay revision of PSU employees with effect from 01-01-2017 which has been approved by the government. The BSNL absorbed government retirees are fully justified to get their pension revised with 15% fitment from 01-01-2017 without linking to the wage revision of BSNL employees. Wage revision of BSNL employees is being delayed due to the affordability condition laid down by the 3rd PRC. The pension revision of BSNL absorbed government retirees has nothing to do with the finance of BSNL, as the entire liability lies with the central government. The Department of Telecommunications, despite the assurance by the hon’ble Minister of Communications for early pension revision, is adopting a negative approach and their mindset , even after a series of discussions and struggles, is for the pension revision only after pay revision of BSNL employees. The central government pensioners have already got their pension revised from 01-01-2016 as per the recommendations of 7th CPC. So it is a great injustice being meted out to the BSNL absorbed government retirees by denying the due pension revision, even after two years of their counterparts in central service got their pension revision.

3. Revise Pension of Central Autonomous Body pensioners.

There are more than 600 Central autonomous bodies. Thousands are employed in these institutions. These institutions were created as special vehicles to deliver certain goods and services for public benefit. Most of these institutions have adopted Govt. of India rules and regulations and service conditions. Some time back, the Govt. issued an executive fiat making it obligatory for these institutions to generate own funds and be self reliant. The said fiat as pointed out by the Managements of these institutions, were impracticable unless the user charges are increased manifold putting the public at large into unbearable financial burden. After the 7th CPC’s recommendations, most of these autonomous bodies revised the wages of the working employees and officers, but chose to punish the pensioners. In quite a number of cases, the pension revision has not taken place. Even the entitled dearness relief was not sanctioned in certain cases. It is our ardent plea to your goodself that the pension revision in the case of retirees from the autonomous bodies may be directed to be undertaken immediately and the funds required for the purpose being made available to these bodies.

4. Provide notional fixation of pension under Option No.3 on the basis of the pay scale/grade pay/pay level from which the pensioner retired. Provide fixation of pay in the case of all pre 2006 pensioners on the basis of the grade Pay/pay level/pay scale of the post or cadre from which one has retired as per the judgements of the court.

It is the interpretation of the Department of Expenditure that led to the denial of the legitimate quantum of pension in respect of some of the pensioners, who could not avail the benefit of pay scale revision during their service. The issue had been the subject matter of judicial scrutiny and the judgements were clearly against the interpretation of the Department of Expenditure Instead of accepting these court verdicts, the Govt. had been dragging the poor pensioners to higher courts denying them what is legitimately due to them. While the serving employees are given the benefit of revision of pay scale or grade pay, the same is denied to the Pensioners. In some cases, the Govt. has implemented the decisions of the tribunal denying the benefit to the other similarly placed personnel. The attitude of the Department of Expenditure has only led to the increase in the number of cases in the court apart from placing unbearable financial burden on the pensioners. This is also clearly against the principle/policy announced by the Government while setting up the administrative tribunals to the effect that the Govt. would abide by the decisions of these tribunals with a view to speed up the delivery of justice. It has now become a common practice for the Govt. to approach the High Court and Supreme Court whenever the decisions of the tribunals go contrary to the position taken by the Govt. We request you to kindly direct the Department of Expenditure to reverse their untenable interpretation in the matter and render justice to the Pensioners.

5 & 6. Extend the benefit of CS(MA) rules to all pensioners who are not covered by CGHS. Increase the FMA to Rs. 2000 pm as has been granted to PF pensioners. Introduce the health insurance scheme as suggested by the 7thCPC.

CGHS came into existence decades back inconsideration of the dire requirement of addressing the health cared needs of the Central Government employees. It commenced its operation in a few stations initially and was later widened to cover 26 important towns of the country including almost all metro cities. It received wider appreciation from the employees and Pensioners. However, its expansion was arrested in the post 1991 period, especially after the report of the Expenditure Reform Commission was submitted to the Government. Its service was curtailed and the budget allocation was drastically reduced. The number of empanelled hospitals at certain points of time got reduced. In a city like Mumbai, where number of Central Government employees and pensioners is huge, at some point of time, there had been only one or two empanelled hospitals. The health insurance scheme, which was one of the recommendations of the 6th CPC, did not take off. The health care has now become abysmally poor. While this is the case of the employees and pensioners in the CGHS covered areas, the situation in other moffusil stations is precarious. While the working employees have the old CCS(MA)system whereby they could get the expenses reimbursed, the poor pensioners are given a pittance of Rs. 1000 p.m.to meet out the health related expenses. Most of pensioners, being at the advanced age, require hospitalisation for continuous treatment of the ailments. Therefore, the demand for the extension of the CCS(MA) Rules had been raised continuously and persistently for many years. The Government has not responded to this demand positively. Rather on many occasions, the Govt. has expressed their inability to consider this demand fearing the huge financial outflow. We request your goodself, to kindly get the matter seriously examined from the humane angle and pending a decision thereon, kindly direct the Department of Expenditure of the Ministry of Finance to increase the FMA toRs 2000 p.m to the pensioners.
Incidentally, we may also bring to your kind notice that the 7th CPC had recommended for introduction of a health insurance scheme. This is an alternative worth considering by the Government as the insurance scheme will obviate the financial outflow from the exchequer. The Departments of Pension and expenditure may be asked to consider this recommendation seriously and evolve a scheme which would go a long way in addressing the health related problems of the pensioners to a very great extent.
7. Raise the minimum pension to 60% of the Minimum wage i.e. Rs. 10800pm.

Minimum Pension is presently computed as half of the minimum wage determined by the Pay Commissions. One is entitled for full pension on completion of the specified number of years of service. Pension is computed as 50% of the last pay drawn. It is, therefore, discernible that the computation of Minimum pension at 50% had been based on the assumption that pension is normally calculated as half of the last pay drawn. This appears to be not based on any sound principle. Minimum pension is related to Minimum wage. Minimum wage is the wage determined on the basis of the minimum basic and essential requirement of a person’s existence. As per the agreed formulations as early as in 1957, the basic essential requirement is considered to be the requirement of the family of a person. Family is defined as “Husband, wife and two children” treating this as three units. The formula stipulates and provides one unit for the bread earner, 0.8 units to his spouse and 0.6 unit for each children. The point at issue is that the minimum pension cannot be less than the minimum wage. Minimum wage being the least below which a person may not be able to live on, the same analogy must apply to the pensioner. Minimum pension is the need based requirement of a pensioner, whose family includes his spouse who is fully depended upon his pension income. However, taking into account the fact that the superannuation age of retirement being 60, no pensioner in the normal circumstances may have dependent children. The logical conclusion that emerges is that the minimum pension must not be less than 60% because the family of the pensioner shall have 1.8 units which is just 60% of the family units of a working employee. We request therefore, that the concerned may be advised to determine the minimum pension at 60% of the minimum wage, which will work out to Rs. 10,800 p.m.

8. Restore the commutation value of pension after 10 years.

The restoration of the commutation value of pension is made after 15 years. The 5th CPC had pointed out that the period of 15 years is too large in as much as the Government recovers the advance with interest in less than 11 years. Accordingly the 5th CPC recommended restoring the commuted value on completion of 12 years, so that full pension is restored. After the subsequent revision of the commutation value factor, the period by which the government could recover the full amount with interest has further been reduced to 10 years. The recommendation of the 5th CPC was not accepted by the Government. With this decision, the Government is presently recovering almost one and half times of the commuted value along with interest, interest being charged on fictional amount of principal. There is absolutely no justification for the stand taken by the Government in the matter. The Pensioner community feels that the Government is behaving like a cruel and parsimonious money lender. At no point of time, the Finance Ministry has been able to advance any logical argument in support of their reluctance to reduce the period from 15 to 10 years. This apart, quite a number of pensioners will not be able to receive the benefit of restoration as they may not be able to live even up-to 75 years. We, therefore, request you to kindly direct the Finance Ministry to issue orders for the restoration to 10 years.

9. Provide increased rate of pension on attainment of 70 years of age.

Taking into account, the increased financial requirement of a pensioner, the earlier Pay Commission had recommended to raise the pension by 20% on attainment of age of 80. This recommendation was implemented. Many of the pensioners are compelled to spend huge sums of money on health related problems and other debilities once they attain the age of 70. The Pensioners Associations had represented before the 7th CPC to increase the pension by 20% on attaining the age of 70 and a periodic rise to reach 100% on attaining the age of 90. The CPC however, on obtaining the opinion from the Defence Ministry turned down this request, even though the Pension welfare department had suggested to increase the pension on attainment of the age of 75. On such a crucial issue, it was unfortunate that the Pay Commission instead of arriving at an independent decision relied upon the opinion of the Defence Ministry. We are not aware of the circumstances under which the Defence Ministry came to such an unhelpful conclusion. Over the years, as your goodself is aware, the Government had been reducing the rate of interest on fixed term deposits, which had adversely affected the Pensioner community as most of the Pensioners have chosen to invest their retirement benefits on these instruments. While the constant reduction of interest rate by the RBI and consequently by the Financial institutions may be in consonance of the sound macro economic policy matters, there is no way the pensioners could compensate for their reduction in monthly income. They face a piquant situation in as much as they face reduction of their income and an increase in their financial requirement simultaneously. At the advance age, there is no cushion for them to absorb the unanticipated expenditure. Having recognised the fact that the advanced age poses problems it would be in the fitness of things, that the pensioner is granted a small increase in their pension income. We, therefore, request that the suggestion put forth by the Pensioner Community to increase the pension as suggested above.

10. Withdraw the contributory pension scheme and restore the defined benefit pension to all
Central Govt. employees.

The main objective of introducing the new contributory pension scheme in 2004 was stated to be to arrest the financial outflow on account of the constant increase in the pension liability of the Government. The IMF had earlier advised the Government to do so as a measure to contain the fiscal deficit in the Union Budget. The employees organisations had been consistently opposing this move and had been presenting the obvious fact that the pension liability of the Government would not be abated by this move, rather it would only register an increase. The 6th CPC set up a Committee to go into the matter headed by Dr. Gayatri. The Committee’s conclusion was akin to what the employees organisations were all along making. The matter came up for the consideration of the 7th CPC again as by that time the new scheme had been in operation for more than a decade. The Commission received many complaints and suggestions from the stake holders. These had been enumerated in their report. Instead of making any recommendation, the Commission suggested to the Government to set up a Committee to go into these complaints and take remedial measures. Govt. set up such a committee under the Chairmanship of the then Secretary, Pension, who heard the presentations made by the Service organisations and the Pensioners Associations. One of the suggestions made before the committee was to guarantee a minimum pension or a minimum return for the investments being made by the employees during their service career. It is reported that the Committee has submitted its report to the Govt. But the same has not come to the public domain so far. The Pensioners are, rightly so, apprehensive of the continuation of the present defined benefit pension system, they enjoy. The employees, who are recruited after1.12004 are highly agitated as the new scheme guarantees no mimum annuity nor does the projection made by the PFRDA gives them any hope for a decent return for the contribution they make every month which is presently 10% of their Pay + DA. The facts now available with the Government over the financial outflow from the exchequer both in respect of the Pension liability of the employees who were recruited prior to 1.1.2004 and the contribution the Government is to make under the new contributory scheme must convince that the decision taken to introduce the new scheme in replacement of the erstwhile defined benefit scheme had been flawed. If that be so, the scheme requires to be scrapped lock stock and barrel as it has not benefitted the Govt, nor the subscribers, i.e. the employees. The discontent over this ill advised decision is growing day by day and the younger generation of workers and officers have become highly critical. We, therefore, request you to kindly cause a revisit with a view to bring back the defined benefit pension scheme for all Central Government employees.

K.K.N.KUTTY
Secretary General